Local equity markets are witnessing huge volatility approaching the last hour of trade. Importantly, local markets are defying gravity and are trading in the green notwithstanding the subdued European markets wherein major markets have lost more than 1%. Most of the Asian markets also settled in the red, reflecting the persistent uncertainty in the global economic arena. Back home, Technology, Auto and Public Sector Undertakings segments are the leading gainers in the BSE sectoral space while Metal and Power sectors are in the negative terrain. Nifty is finding tough resistance at 5,000 level and it is currently trading a tad-lower than this psychological level. Key benchmark indices are likely to settle on a flat-positive note which will be significant given the turbulent global equity markets. The market breadth on the BSE was in favour of advances in the ratio of 1445:1261 while 111 shares remained unchanged.

The 30-share BSE Sensex advanced by 48.86 points or 0.29% to 16,620.89. The index touched a high and a low of 16,697.05 and 16,571.45, respectively.

The BSE Mid-cap and Small-cap indices gained 0.13% and 0.30%, respectively.

TECk up 1.19%, Auto up 0.88%, Public Sector Undertakings (PSU) up 0.49%, Information Technology (IT) up 0.47% and Capital Goods (CG) 0.45% were the main gainers in the BSE sectoral space.

On the other hand, Metal down 0.75%, Power down 0.22% and Bankex down 0.15% were the main losers in the BSE sectoral space.

RCom up 9.41%, ONGC up 3.36%, Bharti Airtel up 3.13%, Reliance Infra up 2.87% and Hero Honda up 2.36% were the major gainers on the Sensex.

On the flip side, Tata Power down 2.35%, Hindalco Industries down 1.92%, Jindal Steel down 1.49%, Wipro down 1.38% and HDFC Bank down 1.02% were the major losers on the index.

Meanwhile, the Cabinet decision to hike price for natural gas of $4.20 per mmBtu (million British thermal units) has been implemented from Tuesday, June 1, which will push up the production costs for power and fertilizer companies. Natural gas to power and fertiliser units is being sold at revised rates from June 1, but for city gas projects the hike will come into effect from June 8.

Last month, the Cabinet had approved the raising of gas price from Rs 3,200 per thousand cubic metres ($1.79 per mmBtu) to Rs 6,818 per thousand cubic metres ($3.818 per mmBtu). After adding royalty, the price for user industries would be Rs 7,500 per thousand cubic metres or $4.2 per mmBtu.

From the price hikes, ONGC and OIL would gain about Rs 5,000 crore and Rs 700 crore in revenue respectively. Similarly, GAIL India would gain Rs 150-200 crore in revenue annually.

The 50-share S&P CNX Nifty advanced by 15.25 points or 0.31% to 4,985.45. The index touched a high and a low of 5,008.60 and 4,967.05, respectively.

RCom up 9.76%, Idea up 7.45%, Ambuja Cements up 3.37%, ONGC up 3.26% and Bharti Airtel up 3.15% were the top gainers on the Nifty.

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China will launch trading of stock futures on April 16, regulators said Friday, in a move that could help boost stock prices and increase the role of China’s securities markets in financing economic development.

The beginning of trading has long been anticipated by stock traders eager for new investment options.

The notice posted Friday on the Web site of the China Securities Regulatory Commission notifies the China Financial Futures Exchange, based in Shanghai, of its approval to begin trading stock futures trading on the Shanghai and Shenzhen stock exchanges.

The benchmark Shanghai-Shenzhen 300 Stock Index must be launched strictly according to regulations, to “effectively prevent market manipulation,” the notice says.

China announced earlier this year that was launching trial margin trading and planned to begin stock futures trading soon.

Regulators previously were reluctant to allow stock futures and margin trading on China’s two stock exchanges in Shanghai and the southern city of Shenzhen, seeing them as too risky for investors and a possible source of volatility.

The government has pushed ahead with efforts to make its securities markets, which are mostly limited to domestic investors, more efficient and attractive despite the global financial crisis.

The markets are still dominated by state-owned companies but Beijing is making it easier for private companies to use them to raise money.

The government also has created a third exchange meant to nurture small and high-tech enterprises, modeled on the U.S.-based Nasdaq market. It began trading in October in Shenzhen with 28 companies listed.

According to a notice on the Web site of the China Financial Futures Exchange, the first contracts to trade will be for May, June, September and December. Investors must pay cash deposits equivalent to 15 percent of the contract value for May and June contracts, and 18 percent deposits for the longer-term contracts.

The contracts are meant to let investors bet on future gains and declines in the market by buying the index at a stipulated value on a particular date.

The exchange began accepting applications for accounts in February. Investors are required to have a minimum of 500,000 yuan ($73,200) in their stock index futures account. Settlements will be on the third Friday of each month when the contracts are due to expire.

The key benchmark indices provisionally ended a choppy trading session with small gains. Equities rebounded from a near 1% fall on Monday, 22 March 2010, triggered by worries higher interest rates may hamper the ongoing strong economic rebound. The BSE 30-share Sensex was provisionally up 30.14 points or 0.17%, up close to 85 points from the day’s low and off closet to 90 points from the day’s high. Metal and pharma stocks rose.

Auto stocks fell for the second day in a row due to rate hike worries. Index heavyweight Reliance Industries jumped. But, the market breadth, indicating the overall health of the market was negative in contrast to a strong breadth earlier in the day. World stocks rose.

The market was volatile as traders rolled over positions in derivatives segment from the March 2010 series to the April 2010 series ahead of the expiry of the near-month March 2010 derivatives contracts on Thursday, 25 March 2010. The market surged in early trade, The Sensex had lost nearly 1% on Monday, 22 March 2010, after a surprise hike in short term interest rates by the Reserve Bank of India (RBI) which it announced after trading hours on Friday, 19 March 2010.

The market pared gains soon after an initial rally. The market further trimmed gains in morning trade, after moving a in a narrow range in morning trade. The market once again moved in a narrow range in mid-morning trade. The key benchmark indices recovered from lower level after erasing almost the entire intraday gains. However, the intraday recovery proved short-lived. The market slipped into the red in afternoon trade. The key benchmark indices regained positive zone in mid-afternoon trade.

Rollover of Nifty futures from March 2010 series to April 2010 series was about 40% at the end of Monday’s trade. Rollover in Mini Nifty futures was about 31% and the market wide rollover stood at about 36%. In individual stocks, GTL, National Aluminum Company, Reliance Power, GTL Infrastructure, and Bharti Airtel, have witnessed high rollover. But rollover was low in REC, Dish TV, Essar Oil, ITC and Welspun-Gujarat Stahl Rohren till Monday.

The stock market remains closed on Wednesday, 24 March 2010, on account of Ram Navmi
The government will allow private-sector firms to issue infrastructure bonds to raise funds for projects, Finance Minister Pranab Mukherjee said on Tuesday. Prime minister Manmohan Singh today said there is a need to spend $1 trillion in infrastructure in the five years to 2016/17.
Mukherjee said the capacity of banks to fund infrastructure projects is stretched and new sources had to be tapped, including allowing private firms to issue infrastructure bonds. The availability of equity, both domestic and FDI (foreign direct investment) continue to remain an area of concern, he said. ” We have still not completely succeeded in exploiting the full potential of insurance and pension funds for deployment in the infrastructure projects,” Mukherjee said.

India plans to spend $514 billion in the five years to 2011/12, and Mukherjee said this goal was proceeding as per schedule.

The Reserve Bank of India (RBI) after trading hours on Friday 19 March 2010, unexpectedly raised interest rates from record-low levels, citing intensifying inflationary pressures and a steady economic recovery. The market had widely expected the RBI to raise rates soon, but the timing of its 25 basis-point hike for its key lending and borrowing rates, before the April 2010 policy review caught market men by surprise.

The RBI raised the repo rate, the rate at which it lends to banks to 5% from 4.75% and reverse repo rate, the rate which it absorbs funds from the system to 3.50% from 3.25% with immediate effect. India is the second major economy after Australia to start raising interest rates with signs of global recovery emerging and local price pressures picking up. China has raised its banks’ reserve requirements but has left its rates unchanged.

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Benchmark indices are trading around the neutral line in the absence of any clear trigger. Markets are trading in a tight-range at this point of time. However, BSE mid-cap and small-cap indices have gained significant strength today. Riding on strong advance figure for Q-4 of FY10, index heavyweight RIL (Reliance Industries Limited) has advanced more than 2% and clearly has been providing life-support for the benchmark indices. Asian markets are trading mixed with negative bias. Oil & Gas, Capital Goods and Consumer Durables segments gained by more than 1% while stocks from Banking and Fast Moving Consumer Goods sectors are putting maximum selling pressure on the broader indices. The broader indices were in favour of the advances in the ratio of 1433:1078 while 85 scrips remained unchanged.

The 30-share BSE Sensex rose 17.37 points or 0.10% to 17,182.36. The index touched a high and a low of 17,213.34 and 17,150.06, respectively.

The BSE Mid-cap and Small-cap indices advanced by 0.40% and 0.76%, respectively.

The main gainers in the BSE sectoral space were Oil & Gas up 1.62%, Capital Goods (CG) up 0.84%, Consumer Durables (CD) up 0.83%, Auto up 0.57% and Healthcare (HC) up 0.51%.

The main losers in the BSE sectoral space were Bankex down 0.78%, Fast Moving Consumer Goods (FMCG) down 0.63%, Public Sector Undertaking (PSU) down 0.38%, TECk down 0.10% and Reality down 0.08%.

In the wake of surging prices of milk and other dairy products, the government has decided to remove the duty on skimmed milk powder (SMP) and some other dairy products. The surging prices of milk have been one of the major contributors in the current high food inflation rate. The government had recently mentioned that the sale price of milk has increased by Rs 1-7 per litre in the country from January 2009.

The Revenue Department has issued a notification in this regard and has allowed the dairy industry to import up to 30,000 tonne SMP at zero duty in a financial year. As per the existing norms, the dairy industry is allowed to import only up to 10,000 tonne SMP at 5% duty under tariff rate quota (TRQ).

The major gainers on the Sensex were RIL up 1.80%, L&T up 1.43%, Sun Pharma up 1.40%, ONGC up 0.94% and Hero Honda up 0.86%.

The major losers on the index were Bharti Airtel down 1.99%, HDFC Bank down 1.76%, ITC down 1.35%, ACC down 1.22% and JP Associates down 1.04%.

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Asian markets are trading firm on Wednesday with investors going in for some hectic buying, tracking a positive close on Wall Street overnight and higher commodity prices. Hopes of a global economic recovery on the back of the European Union’s move to help Greece get out of its debts and some encouraging reports from across the globe are also bolstering sentiment to a significant extent.

Financials, resources and industrials stocks are among the notable gainers in the Australian market. Stocks from various other sectors are also trading firm. The benchmark S&P/ASX 200 index is up 96.2 points or 2.1% at 4,664. The broader All Ordinaries index is currently trading at 4,683, up 92.4 points or 2% over its previous close.

On Tuesday, the S&P/ASX 200 index had ended up 22.3 points or 0.49% at 4,568, while the All Ordinaries index moved up 20.4 points or 0.45% to 4,591.

Among bank stocks, ANZ Bank is up 3.5%, National Australia Bank is trading higher by 3.3%, Westpac Banking Corporation is gaining about 2% and Commonwealth Bank of Australia is up with a gain of 2.5%. Macquarie Group is trading higher by 1.4%.

In the materials space, BHP Billiton is up 1.8%, Rio Tinto is gaining about 2.8% and Newcrest Mining is trading higher by 3.75%. Bluescope Steel, Orica, Incitec Pivot, Fortescue Metals and Lihir Gold are also trading notably higher.

Among energy stocks, Woodside Petroleum is up 1.6%, Santos is gaining 1.65%, Oil Search is up 2.2% and Origin Energy is trading stronger by about 2.5%.

Shares of Warrnambool Cheese & Butter Factory Co Holdings Ltd are up nearly 8% after the group received an improved takeover offer from Murray Goulburn Co-Operative Co Ltd. On Tuesday, WBC had reported a significant rise in first-half profit and said its outlook is positive.

Coffey International is down nearly 8% due to weak results. The global engineering and project management provider’s net profit fell 20% to A$10.85 million in the six months to December 31, from A$13.51 million in the prior corresponding half. Operating earnings before interest, tax, depreciation and amortization fell 14% to A$31.1 million. The company has blamed a strong Australian dollar exchange rate and the global financial crisis for the fall in its first-half profit.

On the economic front, an index measuring skilled job vacancies in Australia added 1.6% to 44.4 in February compared to the previous month, the Department of Employment and Workforce Relations said. That follows a 1.1% monthly increase in January.

Among the individual components, marketing and advertising positions jumped 9.9% on month, while metal trades and construction jobs also were sharply higher. The availability of health profession and accounting positions saw significant declines. By region, New South Wales, South Australia, Western Australia and Tasmania saw an increase in skilled vacancies, while Victoria, Queensland and the Northern Territory all saw declines.

A forward-looking index measuring the Australian economy added 1.3 points or 0.5% in December compared to the previous month, the Westpac/Melbourne Institute index revealed, coming in at 245.8. That follows the 1% monthly increase in November. On an annualized basis, the index jumped 6.2% after jumping 5.4% on year in the previous month. The survey also showed that the coincident index climbed 1 point or 0.4%.

In the currency market, the Australian dollar opened notably higher thanks to the positive close on Wall Street overnight. The Aussie was quoting at US$0.9008-US$0.9011 in early trades, up 0.85% from Tuesday’s close of US$0.8932-US$0.8937. The Australian dollar is currently trading at 0.9007 to the U.S. dollar.

The Japanese stock market is trading firm on Wednesday with investors picking up stocks cutting across various sectors.

The benchmark Nikkei 225 index, which rose to 10,258, was up 210.37 points or 2.1% at 10,245 at the end of the morning session.

The mood is so positive that just three stocks out of the 225-stock strong Nikkei 225 index are currently down in the red.

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After getting off to a good start, the local equity markets continued to add weight in the mid-morning session tracking strong global cues. The BSE Sensex and the S&P CNX Nifty touched fresh highs and were trading near those levels. The bears were bleeding in trade as the bulls were dominating the entire sectoral space of the Bombay Stock Exchange (BSE). Metal stocks were the major gainers in trade led by Tata Steel, Hindalco Inds and Sterlite Inds up anywhere between 4.35% and 3.23%. Tata Steel has posted its first consolidated profit in four quarters for the three months ended on December 31, 2009. Stocks from consumer durables, realty and capital goods space were also doing well at this point of time. All the 30 components of the BSE’s sensitive index were trading in the green. Second line stocks were also witnessing value picking from investors. The market breadth on the BSE remained strong; the gainers thrashed the losers in a ratio of 1729:557 while 61 shares were unchanged.

The 30-share BSE Sensex zoomed 227.61 points or 1.40% to 16,454.29. The index touched a high and a low of 16,457.11 and 16,228.91, respectively.

The BSE Mid-cap and Small-cap indices gained 1.31% and 1.20%, respectively.
In the BSE sectoral space the main gainers were, Metal up 2.92%, Consumer Durables (CD) up 1.90%, Realty up 1.76%, Capital Goods (CG) up 1.57% and Bankex up 1.51%.

There were no losers in the BSE sectoral space.
Meanwhile, the chairman of Prime Minister’s Economic Advisory Council (EAC) C Rangarajan, on Tuesday, said that India should move towards the path of fiscal consolidation as the economic growth was resuming.

Rangarajan said that the process of fiscal consolidation must begin now as the economy was picking up again while the fiscal deficit, at the level it currently is, will be unsustainable in the long run. Hit first by the global commodity rally and then the recession in advanced economies following the events of September 2008, the Indian government was forced to take expansionary fiscal policies which pushed the deficit to a 16 year high of 6.8% in FY10.

Tata Steel up 4.35%, Hindalco Inds up 4.27%, Sterlite Inds up 3.23%, L&T up 2.23% and Tata Power up 2.13% were the major gainers on the Sensex.

There were no losers on the benchmark index.
The Indian government said on Tuesday that all the hurdles in the way of the much-awaited auction of third generation (3G) radio spectrum had been cleared, although there was yet no clarity regarding the possible timing of the event. The auction has been delayed thrice owing to differences between telecom and defence establishments on availability of spectrum.

But union communications minister said that the Ministry was yet to receive directions from the Law Ministry as well as the Finance Ministry. ‘There is no clarity yet. I am waiting for directions from the Finance Ministry and the Law Ministry and have not got any from them,’ said A Raja.

The S&P CNX Nifty soared 1.44% to 4925.45 from its previous close of 4855.75. The index touched a high and a low of 4926 and 4857.60, respectively.

Tata Steel up 4.43%, Hindalco Inds up 4.33%, Sterlite Inds up 3.38%, Tata Power up 2.62% and L&T up 2.33% were the top gainers on the Nifty.

While Idea down 0.09% and Hero Honda down 0.08% were the only losers on the broadly followed index.

Among Asian markets, Hang Seng advanced 1.77%, Jakarta Composite rose 0.67%, KLSE Composite added 0.84%, Nikkei 225 surged 2.57%, Straits Times gained 1.10% and Seoul Composite soared 1.66% and.

Early yesterday afternoon, the US and Canada simultaneously released their Trade Balance. The U.S December Trade Balance came out wider than expected ” the deficit rose to -40.2B as imports surged more than exports.

Forex Analysts had predicted that the deficit would contract to 35.8B from its previous reported level of 36.4B, instead the US trade gap unexpectedly widened to its biggest level this year.

Even though exports climbed to their highest level since October “08, this eighth consecutive rise in exports was trumped by an 8.4% increase in Imports (particularly petroleum).

The result of faster economic growth in emerging countries combined with a drop in the dollar’s value is allowing American goods are becoming more competitive and may in fact propel gains in sales overseas that will spur further gains in U.S. manufacturing.

On the other side of the 49th parallel, Canada also saw their Trade Deficit widen more than expected. As imports slightly outpaced exports, Canada’s trade deficit remained at 0.2B, versus the expected forecast that the trade deficit would shrink to 0.1B. The 1.7% increase in exports was slightly outpaced by a 1.8% rise in imports resulting in Canada’s trade deficit with the world widening to $246 million in December from $201 million in November.

According to the Bank of Canada, the combination of low U.S demand and strong Canadian dollar are a “significant drag” on the economy. Governor Mark Carney has pledged to keep his benchmark lending rate at a record 0.25 percent through June to stimulate demand unless the inflation outlook shifts.

Following the release of both countries trade balances, the Canadian currency tumbled against the USD- the pair increased from the day’s open of 1.06651 USD/CAD to 1.0686; however, by yesterday’s close, the Loonie managed to regain some of its lost ground against its US counterpart- closing at 1.06265.

Across the Atlantic, the Euro continues to move away from its 8 month low against the USD, as speculations increase that today’s EU summit will shed light on a possible rescue package for Greece. With the EU holding their 1 day summit today, the EUR increased from yesterday’s close of 1.37336USD to a high of 1.37995 in Asian markets early this morning.

While the Euro continues to rise versus its American counterpart, the British Pound continues to plummet against the USD. Yesterday, the Sterling was hit hard as the BoE Inflation report forecasted low inflation for a long period, suggesting more quantitative easing ahead; the Pound plunged 0.88% from its opening price of 1.57088 to 1.55701, finishing off the day at 1.55974.

Yesterday, the Bank of England lowered U.K.’s economic outlook and forecast inflation to undershoot its 2% target. The central bank Governor Mervyn King also kept the door open for further quantitative easing.

Britain’s February Inflation Report depicts economic growth to reach around 3.2% in the second quarter of next year- smaller than the previous estimate of 4%. According the BoE, the strength of the recovery is highly uncertain and output is unlikely to return to a level consistent with its pre-crisis trend for a considerable period.

King forecasted inflation to exceed 3% in January, but estimates the figure to fall below the target quickly. Annual inflation had exceeded the central bank’s 2% target in December for the first time since May 2009 and stood at a nine-month high of 2.9%. “It is more likely than not that inflation will be below the target for much of the forecast period, but the risks are broadly balanced by the end,” the bank said.

Shortly midnight, Australia released its employment change for January as well as its current unemployment rate. With both numbers coming out better than expected ” employment change increased to 52.7K versus expected 15.1K causing the unemployment rate to tumble to 5.3% versus expected 5.6% and prior 5.5% ” the Aussie rose more than 1% against the dollar and the Yen.

The AUD/USD opened in Asian Markets this morning at 0.87506- after the release of the better than expected employment data, the pair increased 1.75% to a week high of 0.89040.